Counsyl: Genetic Testing Meets Amazon

“DNA screening for the important moments in life”, says Counsyl’s website, with family vignettes playing on loop on the site’s background. Counsyl sells a genetic test, such that via a blood or saliva sample, couples seeking to have children can check their likelihood for passing on 100 different diseases. The test is offered for sub-$700, a stark comparison to other testing done today which can cost thousands of dollars while only checking for one disease, and even then being limited to certain ethnic groups. Some insurers are even covering the testing offered by Counsyl, slashing the cost to sub-$100. Armed with this previously hard-to-come-by information, couples can choose whether or not to act, for example by pursuing in vitro fertilization. Counsyl reports “35-40% of people tested” as being carriers for at least one disease in the test, with both members of the couple being carriers for the same disease in approximately 0.7% of cases.

The pricing of the tests is a key factor in the company’s business model, by allowing Counsyl access to as much data as possible (as opposed to pricing higher and attracting a small user base). The company is “creating rule sets for how to understand what different mutations mean” and is processing a half-a-terabyte of data per day. As the company performs more tests they improve in DNA data interpretation; in fact if “one were to take all of the published research papers associated with all of the mutations that Counsyl tests for, it would take five work years to read them all”.

The company’s business model directly reinforces the data-driven mission of the company by allowing them to offer the tests for such a price. Referred to as “the Jeff Bezos of bioinformatics”, one of the company’s co-founders constantly seeks ways to make the testing as efficient as possible, from in-house image processing software slashing testing errors, robotic arms to handle trays of samples, to billing infrastructure to help the company manage its 700 insurer relationships. In building its lab from the ground up, not originally part of the company’s plans, Counsyl was able to ensure that they could build in a way most conducive to their operation, and to scaling.

And the model is self-reinforcing. By building in such a way to be as cost-effective and speedy as possible, Counsyl is able to offer the lowest prices and test for the highest number of diseases. The company is able to attract a larger user base with its pricing choice, thereby pulling in even more data by which to improve its testing, further attracting later customers. Counsyl wants to move beyond testing during pregnancy planning, becoming part of the conversation as customers move through their life. The key for the company is in making the data actionable, which they strive to do in how they offer the data, and by getting involved early on as couples examine their genetics. The model puts Counsyl in a very defensible position as they wade into these uncharted waters.

Previous:

Kensho – King of Financial Data Analytics

Next:

Ayasdi – a different way of looking at data

Student comments on Counsyl: Genetic Testing Meets Amazon

  1. Interesting post! One of the issues that Counsyl will need to focus on is communication with the would-be parents. When the results say both people are carriers, does it mean the child will definitely have the disease? What are potential treatments? How would it affect quality of life? I imagine reading the test results is a very emotional experience. How Counsyl “counsels” at that moment will determine whether it will be able to travel through word-of-mouth or be part of a tragic experience. Privacy is another concern that Counsyl will need to invest in to protect – a leak can be quite damaging to the brand.

Leave a comment